The Ultimate Guide to Choosing the Best Small Business Bank Account in Australia (2024)

What is a business bank account, anyway?

It's a specific transaction account designed to handle income and expenses for a single business entity.

In reality, there’s no noticeable difference between personal accounts and business accounts. The word ‘business’ implies you’re getting more for your money, but that’s rarely the case. 

Can I use the same account for personal and business? 

For sole traders, you have some flexibility. Technically, you can use a personal account for business transactions. However, a separate business account is strongly recommended for record-keeping.

But for other business structures like partnerships, companies and trusts, a separate business bank account is mandatory. The reason behind that is it will help clear financial separation between the business and its owners and for adhering to various regulations like:

• Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF): Businesses in certain industries (e.g., real estate agents and money exchanges) might need to comply with AML/CTF regulations. A separate account helps with transaction monitoring and reporting suspicious activity.
• Australian Consumer Law (ACL): Businesses must comply with the ACL's fair trading provisions. A separate account can help demonstrate clear pricing and avoid misleading consumers about personal and business transactions.
• Industry-Specific Regulations: Some industries (e.g., legal practice, real estate) have specific regulations regarding client trust money. A trust account helps ensure proper segregation of client funds.
• Tax Reporting: The ATO requires businesses to maintain proper financial records. A separate business bank account simplifies record-keeping and provides a clear audit trail for business income and expenses. This makes tax filing and audits smoother.

Here are more reasons why you need to separate personal and business bank accounts. 

What are the benefits of a business bank account over a personal bank account?

One of the best benefits of a business bank account in Australia is the protection it offers you, both financially and in the eyes of the ATO (Australian Taxation Office). 

This protection is known as Limited Liability Protection.

Limited liability is a legal concept that applies to certain business structures in Australia, such as companies and partnerships. It offers a shield between your personal assets (like your car or house) and the business's finances. This means that if your business faces financial troubles, debts, or lawsuits, your personal assets are generally less likely to be at risk.

While limited liability offers valuable protection, having a separate business bank account can further strengthen this shield.

By keeping personal and business transactions separate, you establish a clear financial record. This strengthens the argument for limited liability in case of legal disputes.

Just imagine your business (a bakery) getting sued by a customer who got sick. If your personal and business finances are mixed in one account, it might be difficult to prove how much money the bakery actually has. This could potentially weaken the limited liability shield and expose your personal assets.

Not yet convinced? Read these benefits of banking with business bank accounts. 

How to Choose The Best Business Bank in Australia?

Step 1 - Evaluate Your Business Needs

Choosing a business bank account is about building a long-term financial partnership, not a one-off interaction.  Before getting lost in account features, take a deep dive into your business needs. Here's what you need to dissect:

Business Structure

• Sole Trader: Low monthly fees or, even better, no monthly fees, minimal transaction charges, and user-friendly online banking with physical and digital debit cards for business expenses are key. Multiple accounts for budgeting is a huge bonus. Some banks may offer basic accounts specifically for sole traders. With Thriday, you can have up to 10 bank accounts at $0 monthly fees.
• Partnership: Prioritise features like multi-signature functionality (requiring multiple approvals for transactions) and online interfaces designed for shared access and management. Multiple cards could be important. This can add to the cost, so watch out for that.
• Company & Trust: Think long-term growth and strategic tools. Consider your needs for finance like business loans, lines of credit, and equipment financing to fuel expansion and investment. It’s not the bank account itself that helps you with this, but your cash flow and how organised you are. Thriday keeps you organised and helps you with budgeting and cash flow from day 1, so when it does come time to get a loan, your cash flow, tax and business reporting and history are all organised in one place.
• All business structures: no matter what structure your business is, the following are fundamental to success
  • Bookkeeping and accounting:  Historically, managing the admin, bookkeeping and accounting for the business has happened outside of the bank account. The process requires multiple tools, and service providers cost a lot of money and have steep learning curves. At Thriday, we think that’s backward, so we built the bookkeeping and accounting into the banking app and automated it. At the end of the day, bookkeeping and accounting are a combination of rules that can be automated. We’re able to save businesses up to 6 hours a week with this system.‍
  • Cash flow and tax forecasting: Although critical to business success, cash flow and tax forecasting and reporting have been left out of most banking options. Again, we think this is so fundamentally important that we’ve integrated financial forecasting with the bank accounts so you can see the health of your business at a glance every time you log into the Thriday app.

How do Industry and Daily Operations Impact Your Choice of Bank Account?

• Cash-Heavy Business: Prioritise accessibility. Look for banks with accessible branch networks for deposits and consider fee structures for cash-handling services. At Thriday, you have access to over 3,000 Australia Post offices that basically become your bank branch where you can deposit cheques and cash.
• High Transaction Volume: Cost matters. Seek accounts with unlimited or low-cost transaction fees to avoid hidden charges. Thriday does not charge a monthly fee for the transaction accounts, and you can make unlimited local transactions at no additional fee.
• International Operations: Go global, save more. Seek competitive foreign exchange rates, seamless international transfers, and potentially multi-currency support. Investigate minimum transfer amounts and any hidden fees associated with international transactions. It’s on our roadmap to offer international wallets.

Remember: Don't just choose a place to store your money. Choose a system that will save you time and money and give you the insights you need to have full control over your business.

In the past, bank accounts haven't provided much value beyond security and basic transactions. But that's all changing! 

Thriday isn't a passive bank account – it's a revolutionary financial tool designed to help your business thrive. We automate tedious tasks, provide proactive financial insights, and create intuitive budgeting tools, all with the goal of saving you time and money. 

Check out why clients love Thriday to see the difference. 

Step 2: Key Things to Consider in a Small Business Bank Account

Fees:

• Account fees (monthly account keeping): This is a recurring fee charged monthly for maintaining the account. It can range from $0 to $25+ depending on the bank and features offered. Thriday is $0 monthly fees.
• Transaction fees: These can be per-transaction charges for various activities:some text
  • Deposits (cash, cheque)
  • Withdrawals (over-the-counter and ATM) - You may incur additional ATM fees if you use another bank's ATM.
  • Transfers (internal - within the bank, external - to other banks)
  • Foreign transactions (international payments, currency conversion) - This may include a transaction fee and a separate currency conversion spread.
• Paper statement fees: Opting for e-statements can help you avoid this cost.
• Overdraft fees: Understand the charges associated with exceeding your account balance.
• Payable transaction fees (BPAY, EFTPOS, etc.): These are fees incurred for using certain bill payment services offered by the bank.
• Minimum balance fees: Some accounts may require maintaining a minimum balance to avoid a penalty fee.
• Cash advance fees: If you plan to use a debit card to withdraw cash, be aware of any cash advance fees that might apply.
• Stop cheque fees: Fees applicable for placing a stop payment order on a cheque.
• Direct debit dishonour fees: These are fees charged if a direct debit payment cannot be processed due to insufficient funds.

Requirements: 

• Minimum opening balance: The minimum amount required to open the account. This can vary significantly. Choose an account with a lower minimum opening balance if you're starting with limited capital.
• Minimum monthly deposit: Some accounts may require a minimum monthly deposit to qualify for fee waivers or other benefits. Not all accounts have this requirement. Avoid accounts with high minimum monthly deposits if your income flow is seasonal.
• Monthly turnover requirements: Certain accounts might have requirements for a minimum monthly amount of transactions flowing through the account. This is uncommon but good to be aware of. If your business has a low transaction volume, avoid accounts with minimum turnover requirements.
• Eligibility criteria (business type, industry, etc.): Some bank accounts may have restrictions based on your business type or industry. Ensure the chosen account caters to your specific business type.

Thriday has no minimum balance, unlimited transactions and $0 monthly fees. See the comprehensive list of account features and fees here.

Features

• Online banking: Robust online banking is a must. In this day and age, you should not need to visit a branch unless you have a cash-heavy business.
• Mobile banking app: A user-friendly mobile app that lets you bank on the go. Ideally, it has added functionality like expense management, receipt scanning and invoicing.
• Bill pay services: Recurring payments with online bill pay. Some banks offer this for free, while others charge a fee.
• ATM Access: If you deal with cash frequently, ensure the bank has a convenient ATM network and offers fee-free withdrawals.
• Merchant services: Accept credit card payments? Look for integrated merchant services with competitive processing rates.
• Business credit cards: A business card can streamline expenses and help with cash flow. It can also become a burden if not used properly. Factor in rewards programs, perks, and annual fees.
• Automation: Given the power of the data in your bank account, look for a system that leverages that data to automate bookkeeping and tax and cash flow forecasting. Knowledge is power.

Customer Service

• Online chat, phone and email support: How easy is reaching a representative when you have questions? Consider the support hours that best suit your needs.
• Response times: Know how quickly the bank typically responds to inquiries, especially in urgent situations.

Thriday has local support based in Melbourne; you can contact us by phone, chat and email.

Security

• Data encryption: Ensure the bank safeguards your financial data with top-tier encryption.
• Two-factor authentication: Key actions like adding new payees or increasing transfer limits should be protected by 2FA. This extra layer of security is vital for small businesses.

Integration with Accounting Software

• Data transfer methods: Seamless integration saves time. Check if the bank links directly to your accounting software (like Xero) or if you'll need manual file transfers. Most accounting software integrations use a feed provided by a screenscraping third party. This can cause delays and limit automation capabilities with dodgy data. That’s why we built banking and accounting together with Thriday. 
• Automatic bank reconciliation: This feature syncs transactions and categorises them, automating bookkeeping. This is a huge time saver and only offered by Thriday.
• Scheduled transactions: Ideal for recurring expenses like rent or utilities.
• Support for Profit-Focused Budgeting: Does the bank offer multiple sub-accounts or easy integration with accounting software that supports the Profit First or other methodology? This can be a game-changer for your business.
• Tax-Savvy Features: Look for banks with features that simplify BAS preparation. Examples could be automatic tax calculation, reporting tools and direct integration with the ATO.

Remember: The best account for you depends on your specific needs and priorities. Taking the time to compare these key features will help you find a financial partner that supports your business's growth.

Our Top Picks of the Best Small Business Banks in Australia (2024)

To help you narrow down your choices, we've carefully evaluated the features, fees, and overall benefits various Australian banks offer. Here's our curated list:

1. Thriday

Pros

• Automated bookkeeping tasks like bill payments and expense categorisation
• Offers potentially lower fees, especially with up to 10 accounts with $0 monthly fees. This plan is free forever and provides essential features like super fast online account opening, $0 monthly account fees, free domestic electronic transfers and free BPAY payments.
• Real-time insights with features like budgeting tools, automated expense categorisation, and access to multiple business accounts for easier budgeting and distribution of funds
• Automate accounting payments such as GST, tax, super, and payroll.
• Cash flow and tax forecasting
• Detailed transaction data with downloadable PDF statements allows for easy expense tracking and insights.
• Quote and invoice software designed to help you get paid faster
• Bill uploading for automated payment scheduling
• Physical and digital Thriday Visa Debit card with Apple Pay and Google Wallet integration for convenient payments
• The ability to send and receive funds via electronic transfer or BPAY within Australia (fees apply for international transactions)
• Option to export transaction data to approved third-party applications or into a CSV file for further analysis
• Mobile app convenience
• Powered by Regional Australia Bank (RAB) and backed by the Commonwealth Financial Claims Scheme, covering account holders up to $250,000.
• Transparent fee structure

Cons

• International transactions incur fees (including a 3.5% currency conversion fee)

Why Consider Thriday?

It’s designed to save you time and money and make your banking work for you. Thriday automates expense tracking and financial management, making it perfect for individuals managing their own businesses. No monthly fees on the base plan. Free for common transactions within Australia (electronic transfers & BPAY). Optional paid plans offer additional features at a defined cost.

Explore Thriday’s pricing options and compare them to traditional banks. 

2. CommBank Business Transaction Account

Pros:

• Zero monthly fees or electronic transaction fees
• Award-winning reliability, robust features, and easy-to-use digital banking
• Free, unlimited ATM transactions at CommBank ATMs
• Option to link a Business Online Saver account for higher interest rates

Cons

• No base interest earned on account balance
• International transaction fees (3%)
• Assisted transactions incur fees ($10/month for up to five transactions)

Why Consider CommBank?

Best for businesses prioritising a well-established bank with user-friendly digital platforms. Suitable if you frequently use CommBank ATMs and want the option to earn higher interest with a linked savings account.

3. Heritage Bank Business Cheque Account

Pros

• Zero monthly fees or electronic transaction fees
• Interest earned on the entire balance
• Exceptional customer service with 24/7 local support
• Free ATM transactions at Heritage Bank & selected major bank ATMs
• Free assisted transactions, cash/cheque deposits (including through Australia Post)

Cons

• A customer-owned bank requiring membership application
• Low base interest rate
• Overseas transaction fees ($5 conversion fee)

Why Consider Heritage?

Great for businesses seeking a fee-free, everyday account with reliable customer service. Ideal if you primarily make transactions within Australia.

4. Suncorp Business Premium Account

Pros

• No monthly fees or electronic transaction fees
• Interest earned on the entire balance
• Higher interest rates are available with flexiRates (no early release penalty)
• Offset feature to reduce loan interest
• Free ATM transactions, assisted transactions, cash/cheque deposits
• Integrated merchant facilities

Cons:

• Low base interest rate
• International transaction fees (3%)

Why Consider Suncorp?

Award-winning customer service. Ideal for businesses seeking fee-free transactions and potential interest benefits. Best if you have or anticipate a Suncorp business loan.

Step 3: Open a Business Bank Account

Preparation is Key

• Gather Essential Documents: Have your ABN (Australian Business Number) or ACN (Australian Company Number, if applicable), business registration documents, and personal identification (driver's licence, passport, etc.) for all owners, partners, and authorised signatories. 
• Additional Documentation: Some banks may request further information like business licences, financial statements, or a business plan.

Choosing the Right Bank

• Evaluate Your Needs: List the important features – low fees, interest on balances, strong online/mobile banking, ATM access, merchant services, loan options, industry specialisation, etc.
• Research and Compare: Use comparison websites, read online reviews, and visit bank branches to discuss your specific business requirements.
• Consider Future Growth: Choose a bank that can scale with your business and offers the flexibility you may need later.

The Application Process

• Apply Online or In-Branch: Some banks require you to apply in a branch, and it takes weeks to approve your account. Others may offer a fully online experience. With Thriday, you can join online in as little as 3 minutes.
• Verification and Approval: The bank will thoroughly verify your business and personal information. This process typically takes a few business days, but with Thriday, it can be done digitally in as little as 3 minutes.
• Account Activation: Once approved, you'll receive your account details, debit card(s), and instructions on accessing online banking. Make an initial deposit to fully activate your account.

Important Notes

• Timing: Allow time for the process, which can vary between banks. Start early to avoid delays.
• Eligibility: Banks may have specific criteria for opening business accounts. Check these in advance.

For a more comprehensive list of requirements, check the step-by-step guide to open an Australian business bank account. 

Making your Final Decision

By now, you're armed with the knowledge to carefully evaluate which bank aligns best with your business's unique needs. Here's the final step:

Prioritise Your Needs

What are your absolute non-negotiables in a business bank? Fee-free transactions? 24/7 support? Consider using a weighted ranking system based on the key features we discussed to make a clear, objective comparison.

Investigate "Deal-breakers"

Are there features you absolutely don't want? For example, some banks charge fees for assisted transactions. If this is unacceptable for your business, instantly cut those from your list.

Get Personal

Schedule informational appointments with your top two or three contenders. Don't just go online; discuss your specific business needs with a representative. These conversations can bring new insights and help you assess if they're a truly supportive financial partner.

You can book a demo with Thriday here.

Conclusion

Let's end the guide with a gentle nudge – choosing the right business bank is an investment in your business's future. 

Don't simply accept the status quo. Use this guide as a tool to empower yourself to make an informed decision and find a financial partner that helps you thrive.